1. Appeal and Error--appealability--partial summary judgment
The appeal of a partial summary judgment on a claim arising from the construction of
apartment units was properly before the Court of Appeals where the order granting summary
judgment on the unfair and deceptive trade practices claim was dispositive of that claim, the trial
court certified that there is no just reason for delaying the appeal, and a substantial right would be
significantly impaired absent immediate appeal due to the possibility of inconsistent verdicts.
2. Fraud--constructive--no fiduciary relationship
The trial court did not err by granting a partial summary judgment for defendant on an
unfair and deceptive practices claim in an action arising from the construction of apartments
where plaintiff contended that it would necessarily be entitled to recover on its unfair and
deceptive trade practice claim if it prevailed on its constructive fraud claim. Constructive fraud
requires a relationship of trust and confidence; notwithstanding standard language in the
agreement between plaintiff and defendant (the contractor) regarding a relationship of trust and
confidence, and deposition testimony that defendant knew that plaintiff expected defendant to
“look after” plaintiff's interests, the architect's constant, close involvement in the project belies
any claim that a “relation of trust and confidence” existed between plaintiff and defendant giving
rise to a fiduciary relationship.
3. Unfair Trade Practices--construction contract--insufficient aggravating
circumstances
The trial court did not err by granting partial summary judgment for defendant on an
unfair and deceptive trade practices claim arising from the construction of apartments where
plaintiff contended that there were sufficient aggravating circumstances to support the claim.
Although plaintiff made numerous allegations that defendant breached its agreement regarding the
construction project, a certificate of substantial completion was signed by the architect and the
project of was subject to local government inspection.
Appeal by plaintiff Eastover Ridge from judgment entered 24May 1999 by Judge L. Oliver Noble, Jr. in Mecklenbur
g County
Superior Court. Heard in the Court of Appeals 11 May 2000.
Robinson, Bradshaw & Hinson, P.A., by Robert W. Fuller and
Lawrence C. Moore, III, for plaintiff-appellant Eastover
Ridge.
Womble Carlyle Sandridge & Rice, P.L.L.C., by Timothy G.
Barber and Steven D. Gardner; and Spriggs & Hollingsworth,
by Douglas L. Patin and Mark Blando, for defendant-appellee
Metric Constructors, Inc.
WALKER, Judge.
The above five cases listed in the caption of this opinion
were consolidated for trial; however, only plaintiff Eastover
Ridge and defendant Metric Constructors, Inc. (case no. 96-CVS-
13243) are parties to this appeal.
On 22 July 1994, plaintiff entered into an agreement with
defendant for the construction of 216 apartment units in nine
buildings, a clubhouse/leasing building, pool, tennis courts,
maintenance building, certain landscape features, and associated
site work. Plaintiff initiated this action on 22 October 1996
and filed an amended complaint four days later, asserting claims
for breach of contract, breach of fiduciary duty and constructive
fraud, unfair trade practices, and equitable relief of recoupment
and setoff. Defendant filed an answer and counterclaim, alleging
breach of contract by plaintiff and seeking recovery in quantum
meruit as well as enforcement of its lien pursuant to N.C. Gen.
Stat. § 44A-13. Plaintiff cross-claimed for quantum meruit
recovery in its reply filed 19 February 1997. On 18 September 1998, defendant filed a motion for partial
summary judgment, seeking to limit damages in accordance with the
liquidated damages provision of the agreement and dismissal of
the plaintiff's claim for unfair and deceptive trade practices.
After a hearing, the trial court granted defendant's motion for
partial summary judgment, dismissing plaintiff's claim for unfair
and deceptive trade practices. The trial court then certified
the judgment as final pursuant to Rule 54(b) of the North
Carolina Rules of Civil Procedure.
Plaintiff assigns as error the trial court's awarding
summary judgment in favor of defendant on the claim for unfair
and deceptive trade practices since: (1) defendant breached its
fiduciary duty to plaintiff resulting in constructive fraud; and
(2) there were sufficient aggravating circumstances. “Under N.C.
Gen. Stat. § 75-1.1, the question of what constitutes an unfair
or deceptive trade practice is an issue of law.” L.C. Williams
Oil Company, Inc. v. Exxon Corp., 625 F.Supp. 477, 482 (M.D. N.C.
1985)(citations omitted). “While a court generally determines
whether a practice is an unfair or deceptive act or practice
based on the jury's findings, if the facts are not disputed the
court should determine whether the defendant's conduct
constitutes an unfair trade practice.” Id. “Summary judgment
has been granted when appropriate.” Id. Summary judgment is
proper when there is no genuine issue as to any material fact and
any party is entitled to judgment as a matter of law. N.C. Gen.
Stat. § 1A-1, Rule 56(c)(1999); Coastal Leasing Corp. v. T-BarCorp., 128 N.C. App. 379, 496 S.E.2d 795 (1998). Defendant, as
the moving party, bears the burden of showing that no triable
issue exists. Roumillat v. Simplistic Enterprises, Inc., 331
N.C. 57, 62-63, 414 S.E.2d 339, 341-342 (1992). This burden can
be met by showing: (1) that an essential element of plaintiff's
claim is nonexistent; (2) that discovery indicates plaintiff
cannot produce evidence to support an essential element; or (3)
that plaintiff cannot surmount an affirmative defense. Id. at
63, 414 S.E.2d at 342. Once a defendant has met that burden, the
plaintiff must forecast evidence tending to show a prima facie
case exists. Id.
[1]Although the parties do not raise the issue, we must
first consider sua sponte whether the plaintiff's appeal is
properly before this Court. See Bailey v. Gooding, 301 N.C. 205,
208, 270 S.E.2d 431, 433 (1980). There is generally no right to
appeal an interlocutory order. Jeffreys v. Raleigh Oaks Joint
Venture, 115 N.C. App. 377, 379, 444 S.E.2d 252, 253 (1994). “An
order or judgment is interlocutory if it is made during the
pendency of an action and does not dispose of the case but
requires further action by the trial court in order to finally
determine the entire controversy.” N.C. Dept. of Transportation
v. Page, 119 N.C. App. 730, 733, 460 S.E.2d 332, 334 (1995).
There are only two means by which an interlocutory order may
be appealed: (1) if the order is final as to some but not all of
the claims or parties and the trial court certifies there is nojust reason to delay the appeal pursuant to N.C.R. Civ. P. 54(b)
or (2) “if the trial court's decision deprives the appellant of a
substantial right which would be lost absent immediate review.”
Bartlett v. Jacobs, 124 N.C. App. 521, 524, 477 S.E.2d 693, 695
(1996), disc. review denied, 345 N.C. 340, 483 S.E.2d 161
(1997)(citations omitted); Anderson v. Atlantic Casualty Ins.
Co., 134 N.C. App. 724, 518 S.E.2d 786 (1999); N.C. Gen. Stat. §
1-277 (1999); N.C. Gen. Stat. § 7A-27 (1999). However, a Rule
54(b) certification is effective to certify an otherwise
interlocutory appeal only if the trial court has entered a final
judgment with regard to a party or a claim in a case which
involves multiple parties or multiple claims. DKH Corp. v.
Rankin-Patterson Oil Co., 348 N.C. 583, 500 S.E.2d 666 (1998).
Rule 54(b) certification of an appeal is reviewable by this Court
“because the trial court's denomination of its decree 'a final
... judgment does not make it so,' if it is not such a judgment.”
First Atl. Mgmt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242,
247, 507 S.E.2d 56, 60 (1998), citing Industries, Inc. v.
Insurance Co., 296 N.C. 486, 491, 251 S.E.2d 443, 447 (1979).
Thus, we must determine whether the order granting defendant
partial summary judgment was final or, in the alternative,
whether a substantial right of plaintiff will be affected absent
immediate appellate review.
“A final judgment is one which disposes of the cause as to
all the parties, leaving nothing to be judicially determinedbetween them in the trial court.” Veazey v. Durham, 231 N.C.
357, 361-362, 57 S.E.2d 377, 381, rehearing denied, 232 N.C. 744,
59 S.E.2d 429 (1950). In the case at bar, the trial court's order
granting defendant partial summary judgment on the unfair and
deceptive trade practices claim is dispositive of that claim, and
the trial court certified that there is no just reason for
delaying the appeal pursuant to Rule 54(b). Furthermore, we
conclude that a substantial right of plaintiff would be
significantly impaired absent immediate appeal due to the
possibility of inconsistent verdicts in later proceedings since
plaintiff's claim against defendant for constructive fraud is
still pending. See First Atl. Mgmt. Corp., 131 N.C. App. 242,
507 S.E.2d 56; Webb v. Triad Appraisal and Adjustment Service,
Inc., 84 N.C. App. 446, 352 S.E.2d 859 (1987). Thus, plaintiff's
appeal is properly before this Court.
[2]We next address plaintiff's contention that summary
judgment was improperly granted since defendant breached its
fiduciary duty to plaintiff resulting in constructive fraud.
Plaintiff argues that if it “prevails on its constructive fraud
claim, it will necessarily be entitled to recover for an unfair
and deceptive trade practice claim.” See Webb, 84 N.C. App. at
449, 352 S.E.2d at 862. Defendant contends that although
plaintiff's claim for constructive fraud was not raised before
nor addressed by the trial court, there is insufficient evidence
to establish constructive fraud as a matter of law.
In order to maintain a cause of action for constructivefraud, plaintiff must allege “facts and circumstances&#
148; which
“created the relation of trust and confidence” and “led up to and
surrounded the consummation of the transaction in which defendant
is alleged to have taken advantage of his position of trust to
the hurt of plaintiff.” Rhodes v. Jones, 232 N.C. 547, 549, 61
S.E.2d 725, 726 (1950); See Barger v. McCoy Hillard & Parks, 346
N.C. 650, 666, 488 S.E.2d 215, 224 (1997). “Constructive fraud
differs from actual fraud in that it is based on a confidential
relationship rather than a specific representation.” Barger, 346
N.C. at 666, 488 S.E.2d at 224.
Plaintiff contends that Article 3 of the parties' agreement
“imposed a fiduciary duty” on defendant. Article 3 provides:
3.1 The Contractor accepts the relationship
of trust and confidence established by this
Agreement and covenants with the Owner to
cooperate with the Architect and utilize the
Contractor's best skill, efforts and judgment
in furthering the interests of the Owner....
Plaintiff also points to the deposition of defendant's Senior
Project Manager, Carl Frinzi, in which the following exchange
occurred:
Q. ... you knew that [Mr. Griffith, an owner
of Eastover] expected you to look after his
interests?
A. Yes.
Q. Because he told you that?
A. Yes.
Q. And you said you were?
A. Uh-huh (yes).
Defendant argues that plaintiff's “constructive fraud claim ispremised on a contractually created alleged fiduciary duty” and
that plaintiff has failed to cite to any authority which
indicates that the “breach of a contractually created fiduciary
duty[] equates to a constructive fraud claim under North Carolina
law.” Defendant further argues that plaintiff has failed to
allege the “existence of a relationship between itself and
[defendant] that triggers a presumptive constructive fraud
claim.”
A careful review of the record reveals that defendant had
previously participated in a bidding process and submitted the
lowest bid for the construction project. Thereafter, the parties
negotiated a cost plus contract. While certain terms of this
contract were specifically negotiated, there is nothing to
indicate that Section 3.1 of Article 3 of the standard AIA
Document A201, entitled “General Conditions of the Contract for
Construction,” was the subject of any specific discussion between
the parties. Furthermore, although Mr. Frinzi did generally
indicate during his deposition testimony that defendant knew
plaintiff expected it to “look after” plaintiff's interests, this
evidence must be viewed in light of the surrounding
circumstances. We note that after negotiating the contract in
question, plaintiff hired an architect, Greg Wood, to administer
the parties' agreement and oversee the project. Article 4 of the
parties' agreement outlines the extensive duties and
responsibilities of the architect and these include:
4.2.1 The Architect will provide
administration of the Contract ... and will
be the Owner's representative (1) during
construction, (2) until final payment is dueand (3) with the Owner's concurrence, from
time to time during the correction period
described in Paragraph 12.2. The Architect
will advise and consult with the Owner. The
Architect will have authority to act on
behalf of the Owner only to the extent
provided in the Contract Documents....
4.2.2 The Architect will visit the site at
intervals appropriate to the stage of
construction to become generally familiar
with the progress and quality of the
completed Work and to determine in general if
the Work is being performed in a manner
indicating that the Work, when completed,
will be in accordance with the Contract
Documents.... On the basis of on-site
observations as an architect, the Architect
will keep the Owner informed of progress of
the Work, and will endeavor to guard the
Owner against defects and deficiencies in the
Work.
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